Namaste! Aaj ka news roundup, Newswala style!

MARKETS

Markets: Sensex closed above the 78,000 mark and Nifty surpassed 23,700, with Axis Bank, ICICI Bank, and HDFC Bank leading the gains. While Nifty Bank and Nifty Private Bank each rose by 1.7%, Nifty Realty fell by 1.8%, and Nifty Metal and Nifty Media declined by 0.7% and 0.5% respectively.

BUSINESS

Why Britannia Industries is Closing its Iconic Taratala Factory

What happened

Britannia Industries has decided to close its historic Taratala factory in Kolkata, offering Voluntary Retirement Scheme (VRS) packages to all 150 workers. Established in 1947, this factory is the second oldest manufacturing unit of the company in India. The closure follows similar shutdowns of Britannia’s Mumbai and Chennai factories.

Although the Taratala factory is situated on an 11-acre plot leased from Kolkata Port, the company has decided that its output is no longer economically viable. The factory's lease, renewed in 2018, extends until 2048. However, Britannia is now focusing on modern facilities with higher production capacities.

Why it matters

This closure marks a significant shift in Britannia's operational strategy, moving away from older, less efficient factories in favour of modern, high-capacity facilities. Despite the Taratala factory's long history and its importance in the company's manufacturing, planning, logistics, and sales operations in the eastern region, the decision highlights the need for more economically viable and technologically advanced production methods. 

Additionally, the closure is part of a broader trend, with Britannia planning to invest up to ₹350 crore in a new facility in Bengal. This investment aims to enhance the company's production capabilities and maintain its market position in Bengal, which is its third-largest market, generating over ₹900 crore in revenue.

Zoom out

While the closure of the Taratala factory might seem like the end of an era, it is unlikely to impact the company or the state’s revenue significantly. However, it does raise questions about the future use of the leased land, with 24 years remaining on the agreement.

BIG MONEY MOVES

Kalpataru Projects shares soar with ₹2,333 crore in new orders

Kalpataru Projects International Ltd announced on June 25 that it has won new orders worth ₹2,333 crore . These orders span the Transmission & Distribution (T&D) sector in India and overseas, an EPC contract for a metal industry plant, and a residential building project in India. Following the news, Kalpataru's share price jumped nearly 3% to ₹1,208.55 on NSE. This boost follows a ₹ 2,071 crore order win in March, indicating strong ongoing growth.

Government approves ₹10,000 crore PLI for Textiles

Textiles Minister Giriraj Singh announced that the government has approved a substantial ₹10,000 crore production-linked incentive (PLI) scheme for the textile industry. Additionally, there are plans to extend this scheme to the garments sector. Singh emphasized the ministry's goal to surpass China in the textile market. Speaking at the India International Garment Fair (IIGF), he urged the industry to target $50 billion in exports.

The PLI scheme, initially sanctioned in 2021 for a five-year period, aims to boost the production of man-made fibre apparel, fabrics, and technical textile products.

BUSINESS

Tata Electronics Teams Up with Synopsys for Cutting-Edge Chip Plant in Gujarat

What happened

Tata Electronics has inked a partnership with California-based Synopsys, a leader in semiconductor design and engineering, to boost the technological capabilities of its forthcoming $10.9 billion semiconductor fabrication plant in Dholera, Gujarat. Announced on June 25, this collaboration will see Synopsys' advanced foundry design platform and other tech solutions like factory automation, data analytics, and computer-aided design integrated into Tata’s new fab.

Why it matters

This partnership is a game-changer for India's semiconductor space. By leveraging Synopsys' expertise, Tata Electronics aims to create a resilient supply chain and meet the rising demand for semiconductor chips in various industries, including smart appliances, railways, automobiles, and defence. 

The Dholera plant, expected to churn out 3 billion chips annually across various node sizes (28nm to 90nm), represents a crucial step towards making India self-reliant in semiconductor manufacturing, a sector currently dominated by global giants like Taiwan Semiconductor Manufacturing Co (TSMC). 

Zoom out

While the partnership with Synopsys sets a promising foundation, challenges wait ahead. The complexity of establishing a fully functional chip fab could delay the projected operational date of 2026. As Tata Electronics and Synopsys work towards this goal, their success could mark a major milestone in India's tech evolution, potentially transforming the country into a hub for semiconductor manufacturing. 

BIG PICTURE

Nvidia's market woes shake global semiconductor stocks

Global semiconductor stocks experienced significant volatility on Tuesday following a sharp decline in Nvidia's shares in the previous session. Nvidia, a leading player in the chip industry, saw over $500 billion wiped off its market capitalization across three trading days, triggering a ripple effect in the sector.

Nvidia's shares had dropped 13% over three consecutive sessions, including a 6.7% fall on Monday, marking its second-steepest drop of the year. Despite this, Nvidia began to rebound on Tuesday, rising around 5.5% by midday. 

OYO unveils first luxury hotel in Dubai, targets Indian tourists

OYO has announced the opening of its inaugural luxury hotel in Dubai, Palette Royal Reflections Hotel and Spa, focusing on Indian tourists post the city's revised visa policy. The hospitality giant anticipates a substantial rise in Indian tourist numbers, aiming to exceed 100,000 visits this year alone. With over 700 properties in the UAE, including 200 in Dubai, OYO's move signals a strategic push to expand its premium offerings globally, particularly in the Middle East. 

BUSINESS

Titan and Kalyan Jewelers Expand Online to Capture Growth

What happened

India’s leading jewellery retailers, Titan and Kalyan Jewelers, are ramping up their online presence to capture younger, tech-savvy customers. Titan recently increased its stake in Caratlane to 100% after a ₹4,621 crore deal last August, while Kalyan acquired the remaining 15% of Candere for ₹42 crore earlier this month. These acquisitions are part of their strategy to diversify and grow in the lifestyle jewellery segment, moving beyond traditional gold jewellery which has been their mainstay.

Why it matters

As the demand for traditional gold jewellery faces volatility, with consumption growth expected to slow to 6-8% in FY25 from 18% in FY24 due to rising gold prices, Titan and Kalyan are focusing on digital platforms.

Online platform sales have seen an average growth of 50-53% over the past five years, driven by the increasing digital adoption among consumers. This shift not only helps mitigate the risks associated with fluctuating gold prices but also aligns with the evolving shopping preferences of younger generations who prioritize style and convenience.

Zoom out

To future-proof their businesses, both Titan and Kalyan are enhancing their omnichannel strategies. Titan has integrated Caratlane into its broader retail strategy, boasting over 270 stores, while Kalyan is expanding Candere’s physical presence with plans to double its 11 stores within two years. This strategic pivot aims to capture the growing market for lightweight, fashion-forward jewellery, ensuring sustained growth in a competitive industry. 

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